Advantages and Disadvantages of new POS
Discuss About The Adoption Of Point Sale Terminals In Nigeria.
The use of technology has become very much the need of firms in different industry. Point of sale is one such technological equipment. This technology has many kinds of advantages and disadvantages and is highly beneficial for the firm that operates its business at many places. It helps in the process of decision making for the companies especially related to financial affairs. This report analyses the different aspects associated with POS.
There are many advantages and disadvantages related with new point of sale systems.
Advantages:
- The system helps owners to track crucial data from their sales transaction at the same instant when it is sold.
- Data collected through POS will help in updating inventory and compiling sales history.
- A very large amount of data can be stored in very less space and it provides robust functionalities like distributing, storing, inputting and tracking of the useful information.
- It helps in making decisions related with inventory management which eliminates confusions and hence helps business to operate on leaner inventory units (Adeoti and Osotimehin, 2012).
- A detailed cost reporting helps in understanding the fact that which product is adding more to the profit of the firm.
- It saves a lot of time of the managers who have the role of managing the information.
- It brings transparency and ensures accountability of various units.
Disadvantages
- Software based POS system have to be upgraded on regular basis. This may involve a lot of cost to be put in.
- There are larger numbers of security risks involved if it gets hacked or goes into the hands of unauthorised person.
There are large numbers of benefits associated with use of POS systems. These systems are highly helpful in the process of decision making as a very precise data is provided by it. This detailed information helps in making of the decisions that are fact based and hence providing competitive advantage to the firms. Apart from this Point of sale gives immediate data about the products that are producing more profits. It also helps in inventory management which helps in cost control which helps in increasing the profitability of the nation (Hongqiang, 2011). It helps in controlling of the financial data which is necessary for having higher profits and hence helps the company in becoming a market leader.
A whole lot of benefits are added with the use of centralised database. This is highly useful for the bigger firms but is also beneficial for the smaller firms. Some of the advantages are as follows:
- High data integrity and low data redundancy can be ensured by keeping data at one place.
- Higher data security as the place where the attacks can be possible is one (Dontigney, 2018).
- Easier access to the data at the required time especially at the time of decision making as the data collected in any part of the world can be available to the decision makers at the same time it is generated.
- Database management and data portability becomes easier.
- Cost effective as lesser amount of resources will be required for data protection.
- Updating and making changes in data is easier.
As the large amount of data can be available with the POS systems hence it contributes largely to the decision making process. The first and the foremost thing that it does is that it helps in making of the data driven decisions which is necessary for gaining of the competitive advantage.
POS provides a precise data related to sale of the products which is necessary for the growth of the organisation and its revenue margins. Since the data that are real time hence a better decisions can be made especially related to discounts and offers. The data gathered can be used for improving back office operations and enhancing consumer experience (Ingram, et al., 2015). It ultimately assists in taking more informed and evaluated decisions. With the help of POS data, customised marketing decisions can be made. It also assists in the process of analysing the data that is crucial for making highly competitive decisions as it helps in focusing towards the loop holes that is present in the sales and promotions. The products that are providing higher benefits can be promoted with the help of details obtained through POS systems.
POS helps in gaining competitive advantage
The first and foremost thing that POS does is that it eliminates manual method for data manipulation. The data that is generated immediately at the point of sale can be tracked with the use of POS system. This can be regarding ordering diminishing stock to finding the best sellers. It can also be done with the help of manual methods, but it is not effective from the point of view of time management (Jones, et al., 2012). It gives the detailed explanation about the type of orders that is more preferred by the customers. This will be beneficial at the time of strategic decision making especially when the STP strategy is to be used.
It can be done with manual methods but it will take more time which is not good in the modern day business. In the manual methods there are lot of chances of getting misinterpreted data which can lead to wrong decisions to be made (Rese, Schreiber and Baier, 2014). Tracking of information takes a lot of time and human efforts and there still will be the confusions regarding the appropriateness of the tracked information. In the modern day business where decisions must be made based on the real time data, the use of manual tracking is not effective.
There is larger number of questions that could be answered with the use of data that is availed through POS. Questions related to the functions like marketing, sales or financial operations can be easily given through the help of POS systems. Apart from this, the queries regarding the customers are also provided which is valuable for the company at the time of decision making.
Many types of information are collected by POS and are of strategic importance. All these information can be used for making of the decisions as well as focusing on the areas where they find discrepancies. Changes in the business processes can be made based on the data that is collected through the POS systems (Hansen and Sia, 2015). Data driven approach in various operations can be followed which can helps the firm in managing the business in a better way.
There are several kinds of telecommunication options that are available with the Four Seasons Greenhouse and Nursery Company. The selection of the telecommunication option must be done as per the requirement of the firm. Some of the most common options available with the firm are regarding the type of network it must use to the type of media they must take use of.
Advantages of having centralised database
Among the various available options LAN could be the best type of network that could be used. This is because the cited firm is a small business and hence the requirement of the network is in very small area. LAN connectivity provides higher speed and takes use of lesser amount of resources which can be beneficial in the case of small firms having limited financial resources.
Wired technology can be beneficial for the small firms like Four Seasons Greenhouse and Nursery. This is due to the reason that wired connectivity is having higher speed as well as there will be less chance to get hacked. Ethernet cables can be used for this connection.
Several types of risks are associated with the use of POS system. There are various ways through which the businesses can be protected against these risks. Three most common types of risks that are brought through the use of POS system are:
- Security: Since a huge amount of data is stored on the POS system and most of the data are of strategic importance hence it is essential that a company ensures the security of these data. If not it may lead to some serious problems to the stakeholders (McCarthy, 2018). If the data gets hacked somehow, then it may lead to financial loss which is not good for the growth of the company. For ensuring security data protection software and other authentication systems must be used.
- Privacy: POS system contains many types of crucial data (Expert market, 2018). This call for the need to manage the privacy of the data stored. It is understood by the fact if the data related to the customers gets into the hands of unauthorised person then it is a loss to their privacy. This does not go in the goodwill of the firm.
- Confidentiality: With the use of POS systems there is always a chance that confidentiality regarding the customers can get leaked. With such a huge number of credit and debit cards being scanned, this becomes a much critical issue. Taking use of the firewalls like passwords can be beneficial in this regards.
Conclusion
From the above report it can be concluded that there are larger number of advantages and disadvantages associated with the use of POS systems. It helps in giving competitive advantage due to precise decision making. Centralised system can be beneficial for the firm as it promotes people in making efficient decisions. LAN with wired connectivity can be beneficial. Along with this security, privacy and confidentiality treats are linked with use of POS systems.
References
Adeoti, O. and Osotimehin, K., (2012) Adoption of point of sale terminals in Nigeria: Assessment of consumers’ level of satisfaction. Research Journal of Finance and Accounting, 3(1), pp.1-6.
Dontigney, E., (2018) The advantages of Centralised Database storage [Online]. Available at: https://itstillworks.com/info-8623828-advantages-centralized-database-storage.html. [Accessed on: 7th May 2018].
Expert market (2018) Expert Point-of-sale. [Online]. Available at: https://www.expertmarket.com/pos/pos-system-advantages. [Accessed on 7th May 2018].
Hansen, R. and Sia, S.K., (2015) Hummel’s Digital Transformation Toward Omnichannel Retailing: Key Lessons Learned. MIS Quarterly Executive, 14(2).
Hongqiang, Z., (2011) The Application of 3G Technology at Electronic Point-of-sale System [J]. Value Engineering, 12, p.170.
Ingram, T.N., LaForge, R.W., Williams, M.R. and Schwepker Jr, C.H., (2015) Sales management: Analysis and decision making. Routledge.
Jones, S.C., Barrie, L., Robinson, L., Allsop, S. and Chikritzhs, T., (2012) Point?of?sale alcohol promotions in the Perth and Sydney metropolitan areas. Drug and alcohol review, 31(6), pp.803-808.
McCarthy, M., (2018) The benefits of Moving to a Point-of-sale (POS) System. [Online] Available at: https://www.allbusiness.com/the-benefits-of-moving-to-a-point-of-sale-pos-system-10206841-1.html. [Accessed on 7th May 2018].
Rese, A., Schreiber, S. and Baier, D., (2014) Technology acceptance modeling of augmented reality at the point of sale: Can surveys be replaced by an analysis of online reviews?. Journal of Retailing and Consumer Services, 21(5), pp.869-876.
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